IT Investment

Technology sector is experiencing decrease in investment as many big players are holding back from new initiatives. Forrester Research that has appeared lately reads, “more than 40 percent of the companies have reined in their technology spending. More businesses in the United States have cut their spending than anywhere else, and financial services firms have been the most aggressive in trimming their technology purchases.” This was found from sample of 950 high-ranking technology managers’ at large businesses in North America and Europe.

As per the details of the study, 49 percent companies in the United States said they would cut back Information Technology budgets, which compares to 38 percent of companies in Canada, 33 percent in the Britain, 32 percent in France and 28 percent in Germany. Forrester, however, was quick to note that the data came from a survey made in the second quarter of 2008, before the economic climate in Europe worsened.

Forrester study says, “Across all regions, companies warned of putting existing and new projects through more demanding decision processes to make sure they would show substantial return on investment. Many of the companies also said they’d put all discretionary spending on hold. Almost 20 percent of those polled in the United States plan to reduce hardware, software and services spending; by far the most dramatic total reductions for any region.”

Some IT giants have recently shown strong financial results. Some of them can be attributed to currency benefits that result from large overseas businesses and a weak dollar. What is more, around 40 percent of the businesses in the manufacturing, retail, utilities and telecommunications categories say they will cut technology.

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